"There
are obligations imposed by LEY 57/1968 on financial institutions -
some banks have not acted with diligence"Source: Banco de España Memoria
del Servicio de Reclamaciones 2008 & El Pais Newspaper - August 2008"New
solutions tailored to the present-day problems must be sought"
"Good supervisors should not limit themselves to analysing the
present, but should also anticipate possible scenarios
of non-viability that might arise in the future and attempt to
reduce problems to a minimum before they emerge"Source: Miguel Ángel
Fernández Ordóñez - Ex-Governor of Banco de España - Speech at
Fundación de Estudios Financieros, Madrid, 1 December 2011

“Come here calmly, and trust in the system that we have and the
transparency we provide” Excelentísimo Señora
Beatriz Corredor Sierra - Ex-Spanish Housing Minister - February 2011

“Spain's voice must be respected again in Brussels and
Frankfurt. We will stop being part of the problem
and will be part of the solution" November 2011"You have
before you a President of the Government who will face up to issues
and not hide himself away"Interview EFE Agency January
2012Excelentísimo Señor Mariano Rajoy Brey -
Presidente del Gobierno de España - November 2011

Ex-Spanish Prime
Minister Mr José Luis Rodríguez Zapatero said in
THE EU PARLIAMENT ON 6 JULY 2010:"My country is based on the rule of law and it respects and ensures
that
laws are respected. The courts are responsible for the
application of law.
We stand shoulder to shoulder with those
people who, maybe, have had the
wool pulled over their eyes in the
property sector"

European Parliament, Committee on Petitions, The Secretariat,
Rue Wiertz, B-1047, Brussels, BelgiumExcelentísimo Señor José Manuel Barroso
President of the
European Commission("The Commission has been working hard to....bring trust and
responsibility back to the financial markets. We want strong and solid
financial
markets in
Europe and globally that have the confidence and
trust of the public and investors. That means giving supervisory
authorities sufficient
information and the
power to act early when a
problem arises. We also need measures to
regulate the behaviour of
actors in the financial markets.
We have seen both in 2008
and in recent
weeks a tendency of not looking enough at the fundamentals, of not
looking enough at the long term,
of following the trend in the hope of
making
some short term gain. This needs to change. We need to
"regain
the confidence of consumers and
investors". - source: Speech in Brussels
2 June 2010)
("Responsible and intelligently regulated financial
markets are central to the new strategy.
We want a thriving banking industry here in Europe.
But we need you to
play your role responsibly" - source: Speech to the European Financial
Services 4 February 2010)
("One idea that I know is essential to the Spanish president:
strengthening economic governance mechanisms in Europe especially in the
euro
area -
Y una idea que sé que es esencial para la presidencia
española: el refuerzo de los mecanismos de gobierno económico en Europa,
especialmente en la zona euro". - source: Joint Press Conference with
José Luis Rodríguez Zapatero, Madrid, 23 February 2010)
Excelentísimo Señora Clara Martínez Alberola
European
Commission Cabinet Member(Responsibilities: Justice, Fundamental Rights, Legal Issues &
Infringements)

Mr
Roberto Barone
President of the Council of the Notariats of the
European Union
The Right Honourable David Cameron MP
Prime Minister of the United Kingdom

The
Right Honourable Nick Clegg MP
Deputy Prime Minister of the United KingdomThe Right
Honourable David Lidington MP
Minister for Europe, Government of the United Kingdom

Jana Mittermaier
Head of Transparency International Liaison Office to the EU
Mr Charles Plant
Chairman of the Solicitors Regulation Authority, Redditch, UK

Mr Des Hudson
Chief Executive of the Law Society, London, UK

Mr Peter Bolton King
Chief Executive of the National Association of
Estate Agents, Warwick, UK
________________________________________________________________________________________________
LEY 57/1968 is a short but very
important Law which was implemented in the Public Interest on 27 July
1968 specifically to safeguard
purchasers deposits
paid in good faith to
developers for off-plan properties. LEY 57/68 Article 7
states that the rights this Law gives to
the
purchaser
have a 'Caracter de Irrenunciables',
which translates to 'Inalienable Character'.
In this context inalienable means:
Unchallengeable, Absolute, Immutable,
Not Able to be Forfeited, Unassailable,
Incontrovertible, Indisputable,
Undeniable.
This article also states that the purchasers rights granted by this Law
are so strong that they cannot be
waived even at the request of the
Purchaser.
The
preamble of the Law explains clearly the
reasons for its
implementation in 1968.
The preamble states that there was justified public
alarm
at the fact
that
repeated abuses had been taking place with regards to off-plan
deposits. It says the abuses which were obvious
criminal acts
had a serious disruption of social life, constituted a serious alteration of
the social coexistence and caused irreparable
damage to
trust and good
faith. It says LEY 57/68 was being introduced in
the Public
Interest to create general preventative standards to
ensure the
real and
effective protection of funds paid in advance by purchasers and to
ensure they received a refund in the event that the
construction,
completion and delivery of the property did not take place for any
reason by the agreed date as per
the contract (Sales Agreement).

40 years after LEY 57/68 was implemented we are
currently experiencing the same
'repeated abuses' and 'obvious criminal acts'.
We
now have exactly the same
situation
of a 'serious disruption of social
life' which unfortunately for many innocent purchasers has again
caused
'irreparable damage to trust and good faith'. The irreparable
damage to trust and good faith is not only to the Spanish Property
Sector
but also to the Spanish justice system which has repeatedly
failed to uphold the inalienable rights of
the purchaser under LEY 57/68.

LEY 57/68 is clear and provides
comprehensive protection for the
purchaser. However, LEY 57/68 needs to be re-drafted to close some
of the loopholes currently being exploited by the developers and banks. The
Banco de España website states: "The Banco de España
is
entrusted with seeing that the disciplinary rules applicable to
credit institutions are complied with, and that
sound banking
practice is used.Also the
Banco de España has to verify
compliance with the specific banking regulations, including those
relating to transparency and
customer
protection".
In August 2008 the Banco de España said in El Pais
newspaper that "it acknowledges that this is the first time
it has
received
complaints for this reason" (LEY 57/68 Bank Guarantee execution) and
that
"we are still resolving cases and our report will
conclude that some banks have not acted with diligence".
The Banco de España stated in its
Memoria del Servicio de Reclamaciones
2008 that there
are "obligations
imposed by LEY 57/1968 on financial institutions".
By its own admission for the last 2 years the
Banco de España has been fully aware
of the scale of the problems surrounding Bank
Guarantees and
non-compliance by Banks and Savings Banks to the obligations imposed on
them by LEY 57/68, however the Banco de
España
hasknowingly
allowed the illegalities to continue and has
failed to act with the required urgency to
stop those illegalities or to protect
the consumer.

Therefore we must conclude that the Banco de España has failed in its
duty to verify compliance with banking regulations, especially those
relating to
transparency and customer protection and has failed to
ensure that the Banks and Savings Banks under its supervision comply
with
the "obligations imposed by LEY 57/1968 on financial
institutions".

The lack of supervision by the Banco de España
has allowed the Banks and Savings Banks to attempt to avoid the
obligations imposed on them
by
LEY 57/1968. In many cases where
Bank Guarantees were issued and the developer has subsequently defaulted
on the contract the Banks &
Savings Banks are
refusing to honour the
Bank Guarantees for various reasons. Purchasers are then forced
into expensive litigation
which is blocking the court systems and
resulting in unacceptable delays. Again the Banks & Savings Banks
together with the developers whom
they have financed are using these
court delays to their advantage by lodging appeals to further
delay the judicial process.
The number of
Bank Guarantee LEY 57/68
cases reaching the courts has increased in excess of 300% in the last 2
years.

Surely there is no other issue in Spain
that has been the subject of such a huge increase in litigation cases
over the past 2 years. We are now
witnessing more Bank
Guarantee LEY 57/68 cases reaching the courts in the past 12 months than the
combined total number of such cases in the
previous
11 years.
Off-plan
purchasers are the innocent victims in a trail of lies, deception,
negligence, lack of due diligence and complete lack
of control
within the
real estate sector.

The
Spanish Government
is aware of the scale of the problem but has also failed to ensure that LEY
57/68 is respected and applied in its entirety.

The ultimate responsibility lies
with
Sr. Rajoy and the
Banco de España for their failure to adequately and effectively supervise the
Banks
& Savings
Banks who are the guardians of LEY 57/68 and without whose
participation many of the illegalities would not have been able
to take
place. Mr
José
Manuel Barroso, president
of the European
Commission, said at a
joint press conference on 23 February 2010 with
Mr José Luis Rodríguez
Zapatero
"One
idea that I know is essential
to the Spanish president: strengthening
economic governance
mechanisms in Europe especially in the euro area".
Well if this is truly essential then they must begin by
strengthening
the economic governance mechanisms of the Spanish
Banks & Savings Banks.

We must remember that
the
Banks & Savings Banks who are supervised by the Banco de España
were the
'vehicle' through which the
illegalities were performed'.

The Banks & Savings Banks funding the developers were happy to
avoid the obligations imposed on them by LEY 57/68 and use purchasers
'unsecured deposit funds' to lessen the Banks exposure to the various
developments.
This is a
serious public order matter and we demand that the
Banco de España and Spanish
Government act immediately to ensure that:

Any purchaser not provided with the legally required Bank
Guarantee by the Bank or Savings Bank who accepted the off-plan
deposit
into their custody is refunded immediately in accordance with LEY
57/68.

Any purchaser in possession of a Bank Guarantee where the developer
has clearly defaulted on the contract is able to execute the Bank
Guarantee, in accordance with LEY 57/68, without the need for lengthy litigation and court delays.

'Fast Track' specialised courts and an official Ombudsman be established to deal with cases
specifically involving Off-Plan Deposits,
Bank Guarantees and the implementation of LEY 57/68. Initially
all cases must be referred to the Ombudsman who would, where
possible,
provide a definitive decision. Any case that still requires litigation proceedings
must then be submitted to the 'Fast Track' specialised
courts. These courts must have judges
experienced in cases involving Bank Guarantees & LEY 57/68.
These 'fast track' courts must
guarantee that any case is heard
within 3 months.

The Spanish Government and Banco de España must immediately set up a
fund to underwrite the refunds on all Bank Guarantee cases
where the Bank or Savings Bank has failed to comply with their
obligations imposed on them by LEY 57/1968. If for any reason the
Bank or Savings Bank fail to comply with their obligations under LEY
57/68 or a court judgment to issue a refund to the purchaser then
due to the negligence of the Banco de España and Spanish Government
the purchaser must be refunded immediately from the fund.

The Spanish Government and Banco de España must act now to ensure
that the abuse being suffered by innocent off-plan purchasers
in Spain is ended immediately and that it is never allowed to happen again.
In this regard it is vital that strict controls and supervision of
all aspects of
off-plan property purchases are introduced which must include:

THE BANCO DE ESPAÑA
and THE BANKS & SAVINGS BANKS

In order to make certain that Banks & Savings Banks always comply with their obligations
imposed by LEY 57/68 the Banco de España
must issue
an
internal
regulation to ensure that funds deposited into a developers
account are scrutinized and accounted for and that the
corresponding
Bank Guarantee is issued immediately to the Lawyer representing the
purchaser.

The Banco de España must immediately create a
National Registry of Bank Guarantees. Immediately a
Bank or Savings Bank receives
the off-plan
deposits they must register the receipt of the
funds together with details of the corresponding Bank Guarantee
with the
National Registry. The registry
should include the full details of the Bank Guarantee including details
of the issuing entity, details of theCuenta
Especial where the funds are held, registered number of the
Bank Guarantee, value of the Bank Guarantee, purchaser name, passport
and/or NIE number, development name, developer name and company
registration number. If a purchaser is not in receipt of a Bank
Guarantee
or believes they have lost the original copy they will apply
with their details to the
Banco de España who must reply within 14 days
confirming
if there was a Bank Guarantee issued in their name.

If there is a valid Bank Guarantee then the Banco de España will ask the
purchaser to sign a form waiving their rights over the original
document.
The Banco
de España will then send a copy to the
purchaser which can be presented for execution to the Bank or
Savings Bank who issued
the Bank Guarantee.

If the
Banco de España states there was not a valid
Bank Guarantee issued in the Purchasers name the Banco de España will then request further
details from the purchaser including a copy of the Bank Transfer
document, copy of the Sales Contract. The
Banco de España will then have
the
evidence to reprimand/fine the Bank for
either failing to issue or failing to verify the existence
of the Bank Guarantee.
The Banco de España will then demand the Bank
immediately issue the Bank Guarantee.

Whenever a Bank Guarantee is executed and a refund made the Bank will be
obliged to report this to the National Registry of Bank Guarantees.
With this system the
Banco de España will always know the total
value of all Bank Guarantees issued, the total value of all executed Bank
Guarantees
and therefore the total value of all 'live'
Bank Guarantees in the market.

The value of all un-executed
Bank Guarantees in the market is a liability of the developers, but
should any
developer go bankrupt then it becomes the liability of the Bank
as the Banks are jointly and severally liablefor all off-plan deposit funds
they accept into their custody.

Part of the planning application made by developers
and promotors must provide evidence to show that they have the necessary
financial
backing to create
a viable
and sustainable project. In addition the application must name the
financial entity or entities that will be responsible for
financing the
project and must
name
the guarantor that will be responsible for accepting the off-plan
deposit funds and that will issue the
corresponding Bank Guarantees.
It
must also
give evidence and details of the Cuenta Especial that has been opened to
accept the off-plan deposit
funds. If the developer or promotor
cannot demonstrate
that they have the required backing from a financial entity and will
therefore be unable to
comply with their obligations under
LEY 57/68
then the
PLANNING APPLICATION MUST BE REFUSED.

DEVELOPERS OBLIGATIONS

The developer must keep the Local Council
/ Town Hall updated at all times with regards to the progress of the
development and must submit
information
every three months to the planning officer
at the Town Hall regarding:

1. Proof of the existence of Bank Guarantees for all purchasers in
accordance with LEY 57/68

2. Justification for delays or changes to the
development plan by Lawyers and/or technical engineers

3. Options available to purchasers for
compensation or cancellation as a result of delays in the building
schedule

This information must be accessible to
purchasers within 15 days of being requested.

LAWYERS

Lawyers acting for
a purchaser must respect the principle of independence
and must demonstrate that they have no 'conflict
of interest'
with the particular
development, developer, promotor, agent
or financial entity funding the project.

BAR ASSOCIATIONS

Bar Associations must comply
diligently with their obligationsand ban and punish with corresponding fines any
known lack of independence
by
Lawyers in these matters.

These strict controls must be implemented as a matter of urgency
to put an immediate end to the wholesale abuses being suffered by innocent
purchasers of
off-plan property in Spain. Unscrupulous and negligent agents,
lawyers, developers and banks must not be allowed to have any
opportunity to abuse the
inalienable rights granted by LEY
57/68 to the purchaser whose off-plan deposits
MUST be FULLY PROTECTEDat
ALL times.

If the Banco de España and Spanish Government fail to act
within defined timescales
on the above issues then we ask the European
Parliament
and European Commission to take firm and
effective action demanding that these very serious financial illegalities are addressed
as a matter of great urgency.
The European Commission states that
"it is working hard to
bring trust and responsibility back to the financial
markets.
That means giving
supervisory authorities sufficient information and the power to act
early
when a
problem arises".

WE DEMAND THAT THIS SUPERVISORY POWER IS
NOW USED TO RECTIFY THE SERIOUS PROBLEMS WE HAVE IDENTIFIED
REGARDING OFF PLAN PROPERTY PURCHASES, DEPOSITS AND BANK GUARANTEES IN
SPAIN.

THIS PETITION IS NOW CLOSED

Bank Guarantees Website is a free voluntary
service providing information regarding LEY 57/68
and Bank Guarantee Abuse. Under no circumstances can the Bank
Guarantees In Spain Website provide advice
on an individual basis or give an opinion on specific individual cases.

Before making a decision or taking any action with
regards to your personal situation we
must strongly advise that
you take independent legal advice.

The Bank Guarantees In Spain Website and Petition does not endorse the
services of any Lawyer or Law Firm.